AVOIDED: A possible ripple effect in California’s supply chain

Good news for the Golden State trucking industry

The Latest

Independent California truck drivers breathe a sigh of relief after a summer filled with AB5 protests at the Golden State's ports. A lower appellate court reversed the injunction to follow the bill’s verbiage after the US Supreme Court sent it back down the judicial pipeline.

What could have happened

A trucker diaspora, that's what. Their protests at California's ports throughout the summer against the AB5 bill garnered local and national attention. The nation saw truckers take their self-owned rigs and slow commuter traffic almost to a standstill.

The drayage component of the supply chain affects all parties, especially when near-work-stoppages and protests come into play. Shippers and importers see their massive cargo loads sitting at the ports and no one to take them to the warehouse.

The Issue

When AB5 became part of the lexicon, it was marketed as the Uber and Lyft bill, requiring companies that hire independent contractors to reclassify them as employees. However, people thought the bill was solely targeting independent subcontractors (drivers) who used ridesharing and food delivery apps as their sole means of making money. They did not know the bill also included drayage truckers because, like Uber and Lyft drivers, they, too, are independent sub-contractors.

But drayage truckers already have systems in place they've abided by for decades.

History

In the 80s, truckers became independent because of deregulated unions. A person could buy their own truck along with the other costs that came with it and then negotiate a fair deal with a carrier on their terms. In addition, the carrier didn't have to make the trucker a W2 employee, and the trucker could remain working with autonomy.

They've become accustomed to this way of doing business for years now. The average drayage trucker is decades in, close to 50 years old. So, it's a rather hard sell telling them the rules of how they work and earn their keep are changing.

Devil's Advocate

Because the fight over AB5 is not officially over, the bill could find a way to gain the upper hand. If it does and wins, California truckers have several options. They can form their own companies, uproot their lives and work elsewhere, do something else entirely, retire, and/or work for a larger carrier business.

AB5 has caused a looming elephant in the room for California truckers that hasn't left the building yet. At KlearNow, we are passionate about all sectors of the supply chain, and it is our duty to keep you abreast of what's going on.

The supply chain's purpose is to deliver an incredible customer experience. A drayage trucker's primary goal is to get the goods they’re hauling from point A to B, no ifs, and's, or but's. Let's say an independent drayage trucker wants to go ahead and become their own company, we can talk about arming them with the tools they need to stand out and attract much more business, making it a win-win for all parties involved.

What are your thoughts on the recent AB5 activity? We want to hear from you. Let’s schedule a call and find a resilient solution together no matter what kind of supply chain legislation comes into play.